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I bet that title got your attention. Now on to the serious stuff.
Here's the next question/request which came up in regards to blog
topics:

From a purely selfish standpoint, I'd like to hear about your
views on bootstrapping vs. VC. I know it goes against your
business model :-) but it must tickle you that to some, the sign
of success is funding and not a successful business.

This is a good one. I love talking about this. It's kind of funny
that the majority of people coming to me are obviously looking to
raise venture capital and don't have this discussion with me.
Yet, after getting to know people or having had worked with them,
we end up having just the conversation mentioned above....usually
over a beer. The question is always asked: "So, as a VC, would
you go out and raise money from a VC?"

I have no idea whether any other VC would so openly say this but
if you can avoid taking venture capital, do so at all costs. No,
really, I am a VC and I truly mean this. If you can't avoid it
altogether, push it out as long as possible until you absolutely
need it. The later you raise money, the better your chances of
having a higher valuation, giving up less of the company and
keeping the most control. Venture capital screws everything up.
It injects a layer of beauracry into your business that only
government intervention could match. It also hijacks so much of
managements' time which could be so much better spent with
customers. Finally, it takes up equity which could be so much
better put to use to buy your Ferrari after the exit (or your
best employees' Ferraris). Most importantly, running around and
telling everyone you're successful because you "raised venture
capital" just labels you as an idiot! Success is in no way
measured by the size of your financing round. In this game, only
the exit and how much of that exit you owned matters!

So let me turn this around a bit before I talk myself out of a
job. There are very specific reasons to raise venture capital.
I've written about this in-depth before but in summary, here are
the reasons you go out and raise money:

1. You need the money and can't generate it via
bootstrapping or sales and are convinced that you will eventually
generate cashflows.

2. You have no clue how to run a business and have zero
network but your product rocks, you're a tech whiz and you trust
your lawyer (preferably he's related and already has money of
his/her own....mom or dad being best, followed by
siblings....caution: even brothers and sisters can be
blood-sucking, milk-you-dry lawyers...mom won't do that).

3. You've already raised venture capital, built up and
successfully sold a business and can "walk the walk and talk the
talk" of a venture backed entrepreneur.

4. Your product is Facebook/Google/Zynga or any of the
other high fliers and you could probably get Tier-1 VC's to
french kiss one another while pole dancing in g-strings on your
conference room table because they want a piece of your pie!

Easy enough, right? All joking aside VC's and their money can
turbo-boost your business. Good VC's have extensive networks of
both potential customers, partners, employees and exit channels.
They can help you get there far quicker if they are supportive,
engaged players on your team. Narturally, there is necessary
homework which has to be done to pick the right one. Sure there
are tons of horrible VC's out there but there are great guys who
add so much value that giving up a piece of your pie and losing
some upside is truly outweighed by how much bigger they can help
to make your exit. There IS a time to raise venture capital but
it has to be well planned and make sense on it's own merit. Just
raising venture capital because that's the thing to do nowadays
makes zero sense.

Further, if you know how to deal with VC's, having either done it
before or having the right advisors, makes the option far more
interesting. VC's (the good ones) aren't out there to invest in
your idea, pull one over on you and then reap all the benefits. I
know for one that I as a VC don't want to run your company. I
want YOU to run your company. Hence, if I invest in you, I also
want to see that I can't easily screw you. Sure, I am trying to
get the best deal for me but a fair deal. If you cave when
negotiating with me, how good can you really be as the CEO of
your company? At the same time, if you have totally unrealistic
expectations of me, you better be Facebook or Groupon to expect
me to accept crap terms. Otherwise, I'm moving on to the next
deal where I see a far better chance of making money.

Like I already said, I am the first to say avoid venture capital.
Bootstrapping is always the best way to build a business. Fund it
yourself and make it profitable. This is the only guaranteed way
that you'll own enough to either do exactly what you want
strategically or to own as much of the upside as possible but
it's hard. Growing to global scale obviously requires external
financing nevertheless and if you have your eyes set on this, go
find the right VC. Being successful and regional is great for
some. Others want to own the global market. For each option there
is a strategy.

BUT forget the concept of seeing yourself as successful for
having raised a round. This is not a measure of success by which
anyone should be measured and don't let yourself get swayed by
the numbers you see in the press. Those are just headlines like
"VC's, Stripper Poles and G-Strings" to grab your attention.